KUALA LUMPUR (Aug 23): Amway (M) Holdings Bhd issued a profit warning for the financial year ending Dec 31, 2023 (FY2023) as inflation took a toll on consumers’ purchasing power and appetites to spend.

“The group’s operating environment remains challenging largely due to both inflation which affects consumers’ ability and willingness to spend, as well as a softer demand for health supplements post-Covid-19 pandemic,” said Amway in quarterly result announcement to Bursa Malaysia.

“In tandem with the expected decline in revenue and coupled with the costs associated with critical business investments and inflationary pressure, the group also foresees a reduction in profit for 2023,” it added.

The group’s net profit more than doubled to RM76.9 million in FY2022 on annual revenue of RM1.514 billion. Earnings per share soared to 46.8 sen from 22.3 sen in FY2021.

For the second financial quarter ended June 30 (2QFY2023), it posted a net profit of RM17.74 million, an 18.5% increase from RM14.98 million a year before, due to price hikes and lower operating expenses. However, its quarterly revenue was marginally lower at RM343.69 million, against RM354.62 million a year ago.

Earnings per share for 2QFY2023 grew to 10.79 sen, from 9.11 sen previously.

Amway declared a second single tier interim dividend of five sen per share, payable on Sept 22.

For the cumulative six months ended June 30 (6MFY2023), its net profit grew 6.15% to RM37.31 million, from RM35.15 million a year before, although revenue fell 3.93% to RM716.51 million, from RM745.85 million in the Jan-June period of last year.

It said the better earnings for 6MFY2023 was due to an increase in prices as well as lower sales incentives and lower spending on operating expenses.

Amway’s share price gained one sen on Wednesday (Aug 23), giving the group a market capitalisation of RM884 million. Year-to-date, the stock has increased 11%.